OMDA moving up nicely off solid ER 

On the back of significant upside delivered in 2025, a key debate is how conservative is 2026 guidance. Considering the strong momentum across all programs + new product launches, we see the potential for repeat outperformance this year. Reiterate Top Pick

• Omada delivered a 8% revenue beat and a $7mn EBITDA beat in 4Q25 ( Exhibit 1)… Revenue increased 58% Y/Y to $75.8mn on 55% Y/Y member growth to 886K, supported by multi-condition adoption, demand for GLP-1 support, and marketing enhancements (24% Y/Y increase in email enrollment rate). Gross margin increased ~320 bps Y/Y to 72.6%, or ~350 bps ahead of Street, which is above the company's LT 70%+ gross margin target. The company posted EBITDA of $8.5mn, above Street at $1.4mn. Of note, Q4 saw a one-time $2mn benefit to revenue/EBITDA resulting from a negotiation with a large customer. Key highlights:

• Covered lives grew by more than 5mn to 25mn+ across 2,000+ customers, where customer retention and satisfaction remains at 90%+. Engagement remained at 55% at 12 months and 50% in 24 months. Penetration across Self-insured/Fully-insured remains below 10% of the $138bn TAM.
• GLP-1 Caretrack now has >150K members (up from 50K in 2024). Announced GLP-1 Flex Care, a new option that gives employers a structured way to connect employees with GLP-1s without taking on employer financial coverage. Specifically, employers can pay for doctor's visits, labs, and behavioral support, while employees purchase branded GLP-1s out of pocket.
• Weight Health grew by >50% Y/Y, while Diabetes and Hypertension both grew by >45% Y/Y.
• While early, Omada is closely watching emerging CMS programs like BALANCE and ACCESS models.

…And issued 2026 guidance with revenue nearly 2% above and adjusted EBITDA $7mn ahead of the Street. Full year guidance is for $312–$322mn in revenue and $7-$15mn in adjusted EBITDA guidance ( Exhibit 2). Importantly EBITDA was guided ahead of the Street despite increased investment in new programs, which we had called out as a key factor in our preview (see - The stage is set for a sharp reversal in the stock; Reiterate OW). Growth pillars include expanding covered lives through new customers and channel partnerships, increasing enrollment effectiveness, and driving deeper engagement & retention through AI. We raised our estimates and went to the high end of revenue guidance ( Exhibit 3). Key assumptions:

• 22% Y/Y revenue growth guidance comes on top of 55% growth in 2025 that included a strong first wave of GLP-1 adoption and commercial momentum. The guidance assumes growth off 885K members based on historical trends on enrollment conversion and engagement and flat ARPU at ~$300 per member.
• Assumes no meaningful contributions from GLP-1 prescribing, GLP-1 Flex Care, or Omada for Cholesterol (adoption by a large enterprise with 300K employees) and minimal revenue from contracts not yet signed
• EBITDA guidance reflects investments in new initiatives (e.g. Prescribing, Flex Care, Cholesterol) while keeping care team headcount relatively flat Y/Y.

Management framed Omada as a beneficiary of AI. Founder and CEO Sean Duffy highlighted the company’s proprietary data set of tens of millions of care team/member exchanges, hundreds of millions biometric data points billions of real world data points. Omada has also embedded AI features such as OmadaSpark for national support into the app and its engineers are leveraging coding tools. Importantly, the adoption of AI tools by the care team is driving efficiencies and giving management greater confidence in further expanding GM beyond 70% longer term. In a recent note we published on AI developments, we highlighted OMDA as well positioned (see –  Private Company Research Series: OpenAI and LLMs—The Perceived vs. Real Risks to HCIT).